Can Hollywood Survive Streaming?
This past decade is the one that altered the very definition of Hollywood. (Verb: to stream.) Streaming services, of course, have been challenging the Hollywood status quo for years. Netflix began streaming movies and television shows in 2007 and has grown into a giant, spending $12 billion on programming, in 2019 alone, to entertain more than 158 million subscribers worldwide. There are 271 online video services available in the United States, according to the research firm Parks Associates.
The business of Hollywood is rife with problems and I’m not just talking about the #metoo movement that has brought awareness to an underlying issue that needs to be resolved. But, more business-centric issues that affect production companies, investors and the general public, whether they realize it or not. Films and TV shows are stories, but they are also products. That is why fans – the consumers – deserve a voice when it comes to what stories they pay to experience, and why investors should be entitled to more data when it comes to funding a project.
Different groups of entrepreneurs, some with vast amounts of experience working in the film and TV industry saw these problems, and have used technology to solve some of the various issues. Filmio is a creative incubator, market validator and distribution launchpad for everyone frustrated with Hollywood’s current model. Another disruptor is Slated, a crowdfunding platform that has created 1.42b investor introductions to 1,420 films. And, LegionM which helps create funding to produce features, with the goal to elevate new talent and provide what the companies hope will be built-in audiences for successful new programming on platforms like Netflix, Apple and others.
Circumnavigating Hollywood’s market flaws
Hollywood’s business model is flawed in a myriad of ways, so let’s look at the three groups of people that play a significant role in the industry and the challenges they face:
1. Content creators
The film and TV industry is unfairly exclusive and selective. If you want to create a project that reaches the masses, you generally need the help of a major studio that possesses vast resources. Even if you would like to create a smaller-scale independent project, you still need the resources to raise capital and distribute it to an audience. Unfortunately, Hollywood is notorious for its lack of diversification and shutting down innovative stories that executives fear won’t make money.
To address these problems, Slated, LegionM and Filmio’s ecosystem exposes projects to investors and larger studios who are interested in the creators’ ideas.
Another problem content creators face is that they can’t be sure of how an audience will react to their project until they see it. What if viewers pay the price of a movie ticket, hate it and then tell everyone else not to waste their time? Creators would save so much time and effort if fans were involved from the beginning.
Filmio makes this possible. The company’s Executive Chairman, Bryan Hertz, has explained in a previous interview that countless film lovers would like to watch more unique, diverse and original content — it’s just challenging for indie filmmakers to fund their projects and reach audiences. So, Filmio created an interactive ecosystem that connects creators and fans and incentivizes fan involvement. Filmio provides networking opportunities between creators, investors and film studios so that content creators can finance their projects and turn them into high-level productions. Fans can give feedback on a story premise and donate to that project so that creators know they are on the right track. This process elevates unique ideas from filmmakers whose content might not get the attention it deserves in the current system.
Although consumers are one of the most significant aspects of film and TV, in the current product to market model, fans are merely end-users. Although consumers who will be spending their time and money to see these productions, they are neglected during the creation process and have little or no input regarding the direction a project goes, or where it falls short/excels. A big studio often guesses what people will watch based on what was popular in the past (historical extrapolation), create more of the same and expect people to pay for it and devote their time watching it. However, the industries that see the most progress (gaming, for instance) typically adapt to consumers’ real-time input, and don’t operate on a model of “you get what you get.” “Consumers are upset about the imminent changes in the media landscape,” consumer behavior researchers at the Langston Company, a Colorado consultancy, concluded in a September report. “These negative feelings are driven by fears of fragmentation, erosion of perceived value and the friction-cost of having multiple streaming accounts.”
The current model is not fair to consumers — without whom, movies, TV and VR experiences would not exist at all — which is why Slated is committed to solving this problem through crowdfunding.
Slated and Filmio’s platforms allow consumers to validate the concepts they want to see come to fruition. This way, content creators have an audience as soon as they conceive their ideas, and fans get to grow increasingly excited about them, organically, as the production process moves along. Fans receive loyalty rewards called FAN Tokens for participating in the platform, and they can use them to donate to their favorite projects as well as receive other perks. On Filmio, when films and shows are created, fans can trust that their input was factored in; and that once the product reaches the market, fans will know that it was genuinely made with their interests in mind.
Investing in the film and TV industry is particularly risky because financiers do not have any guarantee that something will be a hit. One of the primary reasons for this risk is that there is little information to analyze. What data points do investors have that can guide their decision-making? As such, they tend to shy away from original projects and channel their money toward more and more sequels because the only assurance they have is the success of franchises. They also favor big studios instead of independent creators.
Filmio, Slated and LegionM work to disrupt that outdated model by giving new producers and talents the access to resources they need to create content and movies that traditional Hollywood would not support. Each month, filmmakers on Slated list hundreds of new projects and thousands of new opportunities for talent, finance and distribution. Slated also helps to sort and highlight projects they think believe could have success. Investors on Slated evaluate new projects listed every month, and get connected to projects with the most active investors, which helps to democratize the traditional funding process and mitigate risk.
Thanks to blockchain very time a fan and creator interact on Filmio’s platform, it creates a data point that investors can look at. So, the more fans that critique project ideas, the more investors will know about what audiences want to see, and what they are already invested in themselves. Additionally, LegionM exposes original projects to opportunities for funding that they might not have otherwise, and financiers are no longer limited to speculating on the success of a project thanks to diversification and by using the JOBS Act to create the world's first ‘FAN-OWNED’ entertainment company.
Providing solutions to first-hand problems
Funding is one way to disrupt the Hollywood model. And, there is a whole slew of other Hollywood tech entrants like the self-proclaimed-unicorn-not-yet-launched Quibi, with a focus on Millennial mobile content. Quibi was created by the media veteran mogul Jeffery Katzenberg and the tech powerhouse Meg Whitman, and already raised an incredible $1b in financing.
The traditional product-to-market model of the entertainment landscape keeps fans out of the loop entirely, leaves an insufficient amount of data for investors and is incredibly difficult for content creators to tap into. Bringing TV, film and VR projects to life should be inclusive, accessible, transparent and meaningful. Thanks to new Hollywood funding platforms and tech, everyone involved in a project can work together to ensure its value. ‘Cord-cutting’ and streaming redefined the media landscape in this past decade. The next decade will usher in a new roster of disruptors tasked with trying to make financial and business sense of the shape-shifting industry.